EXHIBIT 99.1
 | News Release |
170 Mt. Airy Road
Basking Ridge, NJ 07920
| CONTACT: | ||
| Fred Lash | ||
| Chief Financial Officer | ||
| 908-766-5000 |
| Investors: Tiernan Cavanna / Lanie Fladell | ||
| Media: Sean Leous | ||
| Financial Dynamics | ||
| 212-850-5600 |
HOOPER HOLMES ANNOUNCES 2003 FOURTH QUARTER AND
FULL YEAR FINANCIAL RESULTS
BASKING RIDGE, NJ, February 25, 2004, Hooper Holmes, Inc. (AMEX:HH) today reported financial results for the fourth quarter and twelve months ended December 31, 2003. Both revenue and operating results were consistent with expectations.
Total revenues for the quarter increased 10.8% to $75.6 million from $68.2 million in the fourth quarter of 2002. Net income was $2.8 million, or $0.04 per diluted share, compared to $4.4 million, or $0.07 per diluted share, in the 2002 fourth quarter. Selling, general, and administrative expenses in the fourth quarter of 2003 included additional expenses associated with the companies acquired in late 2002 and 2003 and approximately $600,000 ($0.005 per diluted share) in legal expenses related to an agreement with a client. The Company does not expect to incur any material additional legal expenses with respect to this client agreement.
Revenues for the Company’s Health Information Business Unit (“HIBU”), comprised of Portamedic, Infolink, Heritage Labs and Medicals Direct Group (our UK subsidiary acquired in August 2002), grew 7.4% to $67.7 million compared to $63.1 million in last year’s fourth quarter. Fourth quarter revenue growth in the HIBU reflects strong performance from Medicals Direct Group, Heritage Labs and Infolink, which was offset by lower revenue from Portamedic due to continued softness in life insurance application activity and competitive pricing in the life insurance market.
Revenues for the Company’s Diversified Business Unit (“DBU”), including D&D Associates which was acquired in October 2002, were $7.9 million in the fourth quarter of 2003 compared to $8.3 million in the third quarter of 2003 due to lower automobile claims activity in New York state and certain clients distributing claims cases more evenly among its service providers.
Jim McNamee, Chairman, President and Chief Executive Officer of Hooper Holmes, stated, “2003 was a good year for Hooper Holmes. In the HIBU, our ability to generate revenue growth despite continued softness in the life insurance industry underscores the strength of our business strategy to broaden our service offering and expand internationally in order to reduce our dependence on life insurance application activity.
The HIBU’s performance was generated by: continuing favorable trends in the U.K. life insurance market driving strong revenue growth in Medicals Direct, which, as a part of Hooper Holmes consolidated results since August of 2002, increased its revenues $5.1 million from $3.0 million in the fourth quarter of 2002 to $8.1 million in the fourth quarter of 2003; Heritage Labs, which generated 34% revenue growth due to continued market share gains; and Infolink, which generated 15% revenue growth on the success of it’s new state-of-the-art call center. Additionally, amid continued softness and rising competition, management believes it maintained its share of the U.S. paramedical examinations market.
In our parallel operating division, the DBU, we made good progress refining the operating infrastructure to make way for expanded profitability in the long term and implemented important strategic initiatives to expand our medical evaluation services practice into new fields—such as workers’ compensation.”
For the year ended December 31, 2003, Hooper Holmes’s revenues increased 15.3% to $300.2 million from $260.3 million in 2002. Net income for 2003 was $15.8 million, or $0.24 per diluted share, which included over $1 million ($0.01 per diluted share) of the previously mentioned legal expenses and the additional SG&A expense of acquired companies in late 2002 and 2003. Throughout 2004, we expect our SG&A cost levels to steadily improve, and in the long-term, we believe SG&A expense will return to more traditional levels. Reported net income for 2002 was $14.3 million, or $0.21 per diluted share. Net income for 2002 included a charge of $4.1 million, or $0.06 per diluted share, related to the Company’s write-down of its investment ine-Nable Corporation.
Mr. McNamee added, “Capitalizing on our strategic progress in the DBU, in October, we purchased Medimax, Inc. and entered the Pennsylvania and New Jersey independent medical examination (IME) markets and in early January 2004, we entered New York’s workers’ compensation IME market with our acquisition of Allegiance Health Services, Inc. The combination of Allegiance and D&D Associates creates one of the largest IME providers in New York State, with superior geographic coverage, expertise in automobile no-fault and workers’ compensation insurance and an impressive operating infrastructure.
Looking ahead, we expect 2004 to be another solid year for Hooper. For the full-year 2004, we expect revenues to range between $325 million and $335 million, with earnings in the range of $0.27 to $0.29 per diluted share.”
Hooper Holmes will host a conference call today to discuss fourth quarter and year end results at 9:30 a.m. Eastern Time. The call will be broadcast live over the Internet, and is accessible at the Company’s website located athttp://www.hooperholmes.com. In addition, an online archive of the broadcast will be available within two hours of the live call until the next quarterly conference call.
Hooper Holmes provides outsourced risk assessment services, including underwriting and claims information to the life, health, automobile, and workers’ compensation insurance industries. The Company provides these health information services through over 275 locations nationwide and in the
United Kingdom.
Certain information contained herein includes information that is forward-looking. The matters referred to in forward-looking statements may be affected by the risks and uncertainties involving the Company’s business. These forward-looking statements are qualified in the entirety by cautionary statements contained in the Company’s Securities and Exchange Commission filings. The Company disclaims any obligation to update these forward-looking statements.
-TABLES TO FOLLOW-
HOOPER HOLMES INC.
2003 CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except share and per share amounts)
Three Months ended December 31, | Twelve Months ended December 31, | |||||||||||||||
| 2003 | 2002 | 2003 | 2002 | |||||||||||||
Revenues | $ | 75,609 | $ | 68,221 | $ | 300,182 | $ | 260,317 | ||||||||
Cost of operations | 54,830 | 49,098 | 213,709 | 185,760 | ||||||||||||
Gross profit | 20,779 | 19,123 | 86,473 | 74,557 | ||||||||||||
Selling, general and administrative expenses | 15,743 | 12,347 | 59,679 | 45,935 | ||||||||||||
Investment reserve | 0 | 0 | 0 | 6,750 | ||||||||||||
Operating income (loss) | 5,036 | 6,776 | 26,794 | 21,872 | ||||||||||||
Other income (expense): | ||||||||||||||||
Interest expense | (173 | ) | (27 | ) | (443 | ) | (113 | ) | ||||||||
Interest income | 185 | 383 | 768 | 2,309 | ||||||||||||
Other (expense) income, net | (145 | ) | (67 | ) | (820 | ) | (619 | ) | ||||||||
| (133 | ) | 289 | (495 | ) | 1,577 | |||||||||||
Income before income taxes | 4,903 | 7,065 | 26,299 | 23,449 | ||||||||||||
Income taxes | 2,122 | 2,642 | 10,452 | 9,156 | ||||||||||||
Net income | $ | 2,781 | $ | 4,423 | $ | 15,847 | $ | 14,293 | ||||||||
Earnings per share: | ||||||||||||||||
Basic | $ | 0.04 | $ | 0.07 | $ | 0.24 | $ | 0.22 | ||||||||
Diluted | $ | 0.04 | $ | 0.07 | $ | 0.24 | $ | 0.21 | ||||||||
Weighted average number of shares: | ||||||||||||||||
Basic | 64,803,095 | 64,505,296 | 64,773,346 | 64,868,163 | ||||||||||||
Diluted | 66,560,189 | 66,288,419 | 66,598,604 | 67,229,119 | ||||||||||||
-MORE-
HOOPER HOLMES INC.
CONSOLIDATED BALANCE SHEETS
| 12/31/03 | 12/31/02 | |||||
ASSETS | ||||||
Current Assets: | ||||||
Cash and cash equivalents | $ | 28,291,019 | $ | 23,298,151 | ||
Marketable securities | 10,603,332 | 22,761,101 | ||||
Accounts receivable, net | 34,663,082 | 27,809,521 | ||||
Other current assets | 6,569,707 | 6,823,818 | ||||
Total current assets | 80,127,140 | 80,692,591 | ||||
Property, plant and equipment: | 33,736,508 | 30,620,147 | ||||
Less: Accumulated depreciation and amortization | 24,152,655 | 21,924,363 | ||||
Property, plant and equipment, net | 9,610,853 | 8,695,784 | ||||
Goodwill, net | 135,130,744 | 117,075,544 | ||||
Intangible assets, net | 29,617,156 | 28,474,439 | ||||
Other assets | 810,358 | 1,291,172 | ||||
Total assets | $ | 255,296,251 | $ | 236,229,530 | ||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||
Current liabilities: | ||||||
Current maturities of long-term debt | $ | 1,000,000 | $ | 172,776 | ||
Accounts payable | 12,106,987 | 10,436,388 | ||||
Accrued expenses: | ||||||
Insurance benefits | 149,613 | 484,748 | ||||
Salaries, wages and fees | 1,478,189 | 1,816,791 | ||||
Payroll and other taxes | 552,464 | 449,093 | ||||
Income taxes payable | 3,116,446 | 2,703,713 | ||||
Other | 8,714,175 | 5,853,132 | ||||
Total current liabilities | 27,117,874 | 21,916,641 | ||||
Long term debt, less current maturities | 2,028,363 | 3,313,983 | ||||
Other long term liabilities | 4,554,160 | 806,195 | ||||
Deferred income taxes | 1,758,879 | 3,483,114 | ||||
Minority interest | 358,705 | 902,650 | ||||
Stockholders’ equity: | ||||||
Common stock, par value $.04 per share; authorized 240,000,000 shares, issued 67,499,074 in 2003 and 2002. | 2,699,963 | 2,699,963 | ||||
Additional paid-in capital | 127,487,718 | 128,079,363 | ||||
Accumulated other comprehensive income | 855,719 | 160,873 | ||||
Retained earnings | 108,613,932 | 96,009,551 | ||||
| 239,657,332 | 226,949,750 | |||||
Less: Treasury stock at cost (2,662,151 and 2,754,151 shares) | 20,179,062 | 21,142,803 | ||||
Total stockholders’ equity | 219,478,270 | 205,806,947 | ||||
Total liabilities and stockholders’ equity | $ | 255,296,251 | $ | 236,229,530 | ||
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